Information systems outsourcing is on a pronounced upswing, according to a new research report from IDC. Global spending reached $56 billion in 2000 and is forecast to hit the $100 billion mark by 2005.

"As companies worldwide deal with forces such as deregulation, privatization, recession, globalization, lack of skilled personnel, shortages of resources, and dynamic technological and economic changes, outsourcing will continue to be an attractive operational alternative and source of competitive advantage for them," says Cynthia Doyle, IDC program manager.

Companies have turned to outsourcing because of its traditional benefits, such as reducing costs and increasing flexibility. Outsourcing also allows companies to keep up with changes in the fast-paced tech sector.

"IT outsourcing in and of itself is a no-brainer for most companies, so now you get into how you do this faster and cheaper," says Frank Casale, chairman and CEO of The Outsourcing Institute.

Ten years ago, there were few outsourcing vendors. Nowadays, companies are faced with thousands of options. Rather than relying on one vendor, a company may go to one place for desktop support and another for Web hosting.

"Our advice to buyers and sellers is to stay very active in this marketplace," says Casale. "You can no longer afford to not get it. There's too much on the line."

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